CIMB Daily Fixed Income Commentary - 24 September 2014

Market Roundup

• US Treasuries extended gains since last week FOMC meeting, following a strong 2T auction result on Tuesday.
• Malaysian government bonds closed mostly unchanged on Tuesday, as the gains in morning session erased following quick profit taking activities in the afternoon session. On top of that, we saw improved trading volume totalling RM2 billion recorded throughout the day, while GII Sep’14 was noted with good demand, pressuring the yield lower by 13bps to 3.25%.
• Thai govvies remained well absorbed by mild buying interest, sending the yields lower by 1-3bps along the curve. Domestic players continued to record decent net buying amount of about Bt2 billion, amid smaller margin of foreign fund outflows totalling Bt842 million on Tuesday.
• Bond market in general was biddish today, 10yr yield went down as persistent bidding interest was seen especially on 10yr benchmark. Foreign names were also seen with interest to bid in 5yr bucket. Not much action seen outside on-the-run series today.
• China Manufacturing preliminary data in September came slightly better than expected at 50.5, versus 50.0 forecasted by economists earlier. However this economic indicator made little impact to drive the market activities, as investors focused on the pipelines. In primary market, Zhejiang Energy Group was heard pricing its 3-year paper at the range of 135bps.